Is Selling Gold to BSP Tax-Free? RA 11256 Explained

Yes — under Republic Act No. 11256, gold that a registered small-scale miner or BSP-accredited trader sells to the Bangko Sentral ng Pilipinas (BSP) is exempt from income tax, excise tax, and value-added tax (VAT). The law amended Sections 32 and 151 of the National Internal Revenue Code (NIRC) to exclude the income from gross income and remove the excise tax, on top of a pre-existing VAT exemption for BSP gold sales under the TRAIN Law. A sale of the same gold to a private, non-BSP buyer does not get this treatment.

What is Republic Act No. 11256? #

Republic Act No. 11256, “An Act to Strengthen the Country’s Gross International Reserves (GIR), Amending for the Purpose Sections 32 and 151 of the National Internal Revenue Code, as Amended, and for Other Purposes,” was signed into law on March 29, 2019. Its goal was to encourage small-scale miners and gold traders to sell gold to the BSP — formalizing a supply chain that had largely bypassed the central bank in favor of unregulated buyers or smuggling — by removing the tax cost that made a BSP sale less attractive than an off-the-books one. A larger, steadier flow of locally mined gold into BSP’s vault directly strengthens the country’s gross international reserves, the metric the law’s title references.

Section 2 of RA 11256 amends Section 151 of the NIRC to exempt the excise tax on gold sold to the BSP. In substance, the provision states that gold which is sold, or eventually sold, to the Bangko Sentral ng Pilipinas — in line with the Section 32(B)(7)(i) income exclusion described below — is exempt from the excise tax otherwise due under Section 151, and that if excise tax on that gold had already been paid before the sale to BSP, the taxpayer may file a claim for refund or credit of that excise tax with the BIR Commissioner.

This refund mechanism matters in practice: a miner does not need to know in advance that gold will end up with the BSP. If excise tax was already remitted on ore or bullion that later gets sold to BSP — directly or through an accredited trader — the excise tax paid can be recovered.

Who qualifies: small-scale miners and accredited traders #

The RA 11256 exemption is not open to every gold seller — it applies specifically to registered small-scale miners under Republic Act No. 7076 (the People’s Small-Scale Mining Act of 1991) and to traders the BSP has formally accredited to buy gold for resale to it. RA 7076 defines small-scale mining as mining activities relying heavily on manual labor, using simple, low-cost, portable equipment, typically conducted within a legally designated Minahang Bayan (people’s mining area) or under a small-scale mining permit or contract. A miner or trader outside these registered/accredited categories does not qualify, even if the gold physically ends up at the BSP.

The law also extends the exemption one step down the supply chain: a small-scale miner’s sale of gold to an accredited trader — where that trader intends to eventually resell the gold to the BSP — receives the same tax treatment as a direct sale to the BSP. This lets miners sell locally to an accredited buyer without losing the exemption, rather than requiring every miner to transact with BSP’s own buying stations directly.

What exactly is exempted: income tax, excise tax, and VAT #

Three separate taxes are addressed, through two different laws working together. RA 11256 itself changes two things in the NIRC:

1. Income tax (NIRC Section 32(B)(7)(i)): Income from the sale of gold to the BSP by registered small-scale miners and accredited traders, and income from a small-scale miner’s sale of gold to an accredited trader for eventual BSP sale, is excluded from gross income. Because it is excluded from gross income rather than merely deducted, it is not subject to income tax, and — since there is no taxable income payment to begin with — the transaction is also outside the scope of creditable withholding tax. The provision, as reproduced consistently across independent compilations of the amended NIRC, reads:

“Income Derived from the Sale of Gold Pursuant to Republic Act No. 7076. — Income derived from the following transactions pursuant to Republic Act No. 7076, otherwise known as the ‘People’s Small-scale Mining Act of 1991’: (1) The sale of gold to the Bangko Sentral ng Pilipinas by registered small-scale miners, as defined under Republic Act No. 7076, and accredited traders; and (2) The sale of gold by registered small-scale miners to accredited traders for eventual sale to the Bangko Sentral ng Pilipinas.” — NIRC Section 32(B)(7)(i), as inserted by Republic Act No. 11256, reproduced across independent statutory compilations (a direct fetch of the official Supreme Court E-Library or Official Gazette copy was not possible while researching this article)

2. Excise tax (NIRC Section 151, as amended): Gold sold, or eventually sold, to the BSP is exempt from excise tax on mineral products, with the refund/credit mechanism described above for tax already paid.
3. VAT (NIRC Section 109, as amended by the TRAIN Law, Republic Act No. 10963): Separately from RA 11256, the sale of gold to the BSP is listed among the VAT-exempt transactions under Section 109 of the NIRC — this exemption predates RA 11256 and was already in place under TRAIN, which had reclassified BSP gold sales from zero-rated to VAT-exempt.

Together, this means a qualifying BSP gold sale carries none of the three tax lines a typical mineral sale would otherwise face.

BIR Revenue Regulations No. 4-2020: the implementing rules #

BIR Revenue Regulations (RR) No. 4-2020, issued under then-Commissioner Caesar R. Dulay around mid-February 2020, is the implementing regulation that lays out how registered small-scale miners and accredited traders actually avail of the RA 11256 exemptions. It confirms that income from BSP gold sales is excluded from gross income and not subject to income tax or withholding tax, that the gold is exempt from excise tax, and that the sale remains VAT-exempt under Section 109. RR No. 4-2020 also sets out the documentary and procedural requirements for claiming a refund or credit of excise tax already paid before a later sale to BSP, consistent with the refund clause in RA 11256 itself. Because this is a regulation implementing a specific exemption rather than a general filing rule, sellers who plan to rely on it should confirm registration/accreditation status and current documentary requirements directly with the BIR before treating a sale as exempt.

Worked example: BSP sale vs. a private buyer #

A concrete example shows why the BSP sale channel matters financially, not just as a compliance formality. Assume a registered small-scale miner, operating under a valid small-scale mining permit, extracts and sells exactly 1 kilogram of gold.

Scenario A — sold to BSP for ₱5,000,000:

The miner receives ₱5,000,000 with no income tax, no excise tax, and no VAT deducted or added on the transaction.

Scenario B — hypothetically, the same 1 kilo sold instead to a private, non-BSP buyer for ₱5,000,000:

• Excise tax would apply at 4% of the actual market value of the gross output under Section 151 of the NIRC as amended by the TRAIN Law (Republic Act No. 10963) — this rate covers gold along with copper, chromite, and other metallic minerals, and does not carry the RA 11256 exemption since the buyer is not the BSP.
• Income tax would apply under ordinary NIRC rules to the miner’s net taxable income from the sale, since the RA 11256 gross-income exclusion is conditioned on a BSP (or eventual-BSP, via an accredited trader) sale.
• VAT could apply at the standard 12% rate if the seller is VAT-registered, because the Section 109 VAT exemption is specific to sales to the BSP, not gold sales generally.

The gap between the two scenarios — three taxes removed entirely versus three taxes applying in full — is the policy lever RA 11256 pulls: it makes the formal, BSP-registered channel the financially rational choice for a miner, instead of an unregulated buyer offering a marginally higher quoted price that ignores the tax difference.

Practical compliance notes #

Availing of the exemption is not automatic just because gold ends up at the BSP — the seller’s registration or accreditation status has to be documented and current. A few practical points follow from the rules above:

• Keep proof of registration/accreditation. A small-scale miner should retain evidence of registration under RA 7076 (permit, Minahang Bayan documentation), and a trader should keep evidence of BSP accreditation, since these are the qualifying facts the exemption turns on.
• The exemption follows the gold, through one accredited step. A miner selling to an accredited trader who resells to BSP is covered; a miner selling to an unaccredited buyer, even if that buyer eventually reaches BSP through other channels, is not automatically covered.
• Refund claims need a paper trail. If excise tax was paid before the eventual BSP sale, the refund/credit claim under RA 11256 and RR No. 4-2020 requires documenting both the original excise tax payment and the subsequent qualifying BSP sale.
• This is a narrow, transaction-specific exemption. It does not exempt a miner’s or trader’s other income, other mineral sales to non-BSP buyers, or unrelated business activities — only the income tax, excise tax, and VAT treatment of the specific gold sold (or eventually sold) to the BSP.

Frequently asked questions #

Is selling gold to the BSP tax-free in the Philippines? #

Yes, for registered small-scale miners and BSP-accredited traders. Under Republic Act No. 11256, income from selling gold to the Bangko Sentral ng Pilipinas (BSP) is excluded from gross income and exempt from income tax, exempt from excise tax under Section 151 of the National Internal Revenue Code, and treated as a VAT-exempt sale under Section 109 of the NIRC as amended by the TRAIN Law.

Who qualifies for the RA 11256 gold tax exemption? #

Two groups qualify: registered small-scale miners as defined under Republic Act No. 7076 (the People’s Small-Scale Mining Act), and traders accredited by the BSP to buy gold for eventual resale to it. A small-scale miner’s sale of gold to an accredited trader, for that trader’s eventual sale to the BSP, gets the same tax treatment as a direct sale to the BSP.

What taxes does RA 11256 exempt gold sales to BSP from? #

RA 11256 amended Section 32 of the National Internal Revenue Code (NIRC) to exclude the income from gross income (exempting it from income tax, and consequently from withholding tax), and amended Section 151 of the NIRC to exempt the gold from excise tax. Separately, under Section 109 of the NIRC as amended by the TRAIN Law, the sale of gold to the BSP is already listed as a VAT-exempt transaction.

What happens if excise tax was already paid before the gold was sold to BSP? #

RA 11256 allows a refund or tax credit. If excise tax on the gold was paid before the sale to the Bangko Sentral ng Pilipinas, the taxpayer may file a claim for refund or credit of that excise tax with the BIR Commissioner, following the procedures under BIR Revenue Regulations No. 4-2020.

What is the excise tax rate on gold sold to a private buyer instead of BSP? #

Gold that is not sold to the BSP does not get the RA 11256 exemption and remains subject to the regular excise tax on metallic minerals under Section 151 of the NIRC, currently 4% of the actual market value of the gross output, as set by the TRAIN Law (Republic Act No. 10963), on top of ordinary income tax and VAT rules for that sale.

Summary #

RA 11256 and its implementing BIR Revenue Regulations No. 4-2020 remove income tax, excise tax, and VAT from gold that registered small-scale miners and BSP-accredited traders sell to the Bangko Sentral ng Pilipinas — a status a private, non-BSP gold sale does not share, where the regular 4% excise tax on metallic minerals, ordinary income tax, and VAT rules still apply. The exemption is deliberately narrow: it depends on the seller’s registration or accreditation status and on the gold reaching the BSP, directly or through one accredited trader, and it leaves a refund/credit path open for excise tax paid before that qualifying sale takes place.